Rix v. Turnbull-Novak, Inc., 9209.

• Decision Date: 06 February 1958
• Docket Number: No. 9209.,9209.
• Citation: 159 F. Supp. 199
• Parties: Irving RIX, Plaintiff, v. TURNBULL-NOVAK, Inc., Defendant.
• Court: U.S. District Court — Western District of Missouri

159 F. Supp. 199

Irving RIX, Plaintiff, v. TURNBULL-NOVAK, Inc., Defendant.

No. 9209.

United States District Court W. D. Missouri, W. D.

February 6, 1958.

Edward L. Scheufler, U. S. Atty., by Joseph L. Flynn, Asst. U. S. Atty., Kansas City, Mo., for plaintiff.

Whitson Rogers, Kansas City, Mo., for defendant.

DUNCAN, Chief Judge.

Plaintiff instituted this action to recover damages from the defendant, under the provisions of § 9 of the Universal Military Training and Service Act¹ (Act of June 24, 1948, c. 625, Title I, § 9, 62 Stat. 614 as amended, 50 U.S.C.A.Appendix, § 459), in the sum of $3,360, which he alleges in due him as a result of plaintiff's discharge as an employee of the defendant, within one year after he was discharged from the military service, which he alleges was in violation of the statute aforesaid.

The essential facts were stipulated, but both sides introduced evidence relative to facts not agreed to. The stipulation and the evidence reveal that J. Gordon Turnbull, Inc., had for many years prior to 1953, operated an extensive architectural and engineering business, with its headquarters in Cleveland, Ohio. It carried on its business in the United States, Canada, Alaska and Japan. It also maintained an office in Kansas City, Missouri, which, during the times involved in this controversy, was in charge of Ed G. Novak, as vice-president and district manager.

Plaintiff was employed by J. Gordon Turnbull, Inc., at a salary of $500 per month, from July 1, 1948, until on or about August 31, 1951, when he was called into active military service. He completed his military service with an honorable discharge, and returned to work for J. Gordon Turnbull, Inc., on or about February 15, 1953 (within less than 90 days of his release from military service), in a different position, status and pay than that held by him at the time he entered military service, and at a salary of $700 per month, and, according to the plaintiff's testimony (which is denied by the defendant), a guaranteed bonus sufficient to equal the sum of $10,000 per year.

For the purpose of disposing of both questions, the court shall make findings and conclusions as to each, although an adverse finding as to plaintiff on either issue would preclude his recovery, so far as this defendant is concerned.

First, I shall determine the question as to whether or not this defendant is a "successor in interest" to J. Gordon Turnbull, Inc. The enactment of 1948 created, for the first time, a liability against a "successor in interest" to the same extent as that of the original employer. J. Gordon Turnbull, Inc., was an individually owned corporation, and all of its stock was owned by J. Gordon Turnbull, who was president, and definitely the guiding influence in carrying on its widespread business activities. Turnbull died on April 1, 1953.

The evidence shows that as a result of his death, the whole organization was disrupted in all of its offices, and thereafter, Mrs. Turnbull was undecided as to what she would do with the business. Several projects in the Kansas City area were unfinished, and were being supervised by J. Gordon Turnbull, Inc., at the time of Turnbull's death.

Between July 6 and 8, Novak made some sort of agreement with J. Gordon Turnbull, Inc., to take over the Kansas City office in its entirety, office fixtures and uncompleted jobs. He organized the corporate defendant for that purpose on July 31, 1953; Novak owned 7,500 shares; Weldon Becket of Los Angeles, 26,000 shares and Kelvin Vanderlip of Los Angeles, owned 3,000 shares. None of these persons had held any stock in J. Gordon Turnbull, Inc., and only Novak had been in any manner connected with its operation. As part of the agreement between Novak and J. Gordon Turnbull, Inc., the latter was to advance the payroll for the new corporation for a period of 15 days.

There is no evidence that J. Gordon Turnbull, Inc., had any further connection or financial interest in Turnbull-Novak, Inc., or ever received any benefits from the management of the projects above mentioned, or received any of the profits thereof. No one connected with J. Gordon Turnbull, Inc., had any voice in the management of Turnbull-Novak, Inc. The new corporation, the evidence reveals, was "on its own". There is no evidence that it had any connection with any other J. Gordon Turnbull, Inc., business or projects after those taken over by it pursuant to the agreement between Novak and J. Gordon Turnbull, Inc.

It seems to me that under the facts as above determined, the defendant is not a "successor in interest" to J. Gordon Turnbull, Inc., within the meaning of the statute. Of course, if Turnbull-Novak was not a successor, the plaintiff, never having been in its employ either before his entry into the military service, or after his return, would not be entitled to recover against it, regardless of any other fact or circumstance in the case.

For the purpose of disposing of the remaining issue, it may be assumed that defendant was a "successor in interest" to J. Gordon Turnbull, Inc. Plaintiff's employment upon discharge from the service, was under an agreement for a new position, a new status and new pay rate, and such employment was not under the provisions of the statute.

There is no question about the plaintiff having been discharged by J. Gordon Turnbull, Inc., after considerable discussion as to whether he would remain in another position. On July 15, 1953, a letter was addressed to him by Novak for that company, terminating his services as of that date, but continuing his pay until July 31, 1953.

Defendant contends that plaintiff was never in its employ, and that it was not the "successor in interest" of J. Gordon Turnbull, Inc., and could, therefore, not be liable to the plaintiff under any circumstances: It further contends that, even assuming it was the "successor in interest" to J. Gordon Turnbull, Inc., plaintiff did not desire to return to his old position of inspector; that he was employed by J. Gordon Turnbull, Inc., under an agreement to return to an entirely different position, status and rate of pay than that held by him at the time he entered the service, and that the plaintiff never sought to be, and never was, re-employed under the provisions of the Act.

On the contrary, plaintiff contends that although his return to the company was in a different position, status and rate of pay than that held by him at the time he entered military service, it was, nevertheless, re-employment within the meaning of the Act, and that he was discharged from such position, without cause, within one year; that defendant was a "successor in interest" to J. Gordon Turnbull, Inc., and is responsible to him in damages for the loss of salary resulting from his discharge.

The law required J. Gordon Turnbull, Inc., to restore plaintiff (if he was still qualified—and he was) to such "position of like seniority, status and pay" as he had at the time he entered the service. Plaintiff could demand no more, and the defendant could do no less. If defendant is correct in either of its contentions, it is not liable.

Prior to his entry into the military service, he had been employed as an inspector (at a salary of $500 per month) on the construction project of the Veterans' Hospital in Kansas City. He was not in charge of the project, but was under the supervision of another inspector, who was in charge thereof.

Although plaintiff attempts to establish the fact that just prior to his entry into the military service he had assumed some other position, and was, for a short time employed in connection with some work with the Air Force Base at Topeka, Kansas, yet there is no evidence indicating that there was any similarity between this job and the job which he finally took when he returned from the service, and there was no increase in pay.

During the time he was in the service, his contacts with the office through Novak, apparently were continued; they had conferences and social meeting during the time he was stationed in Dayton, Ohio, and this was several months before he was...